Poplatník uspěl ve sporu o uplatnění odpočtu na výzkum a vývoj

The Supreme Administrative Court (5 Afs 84/2025 – 56) annulled the judgment of the regional court regarding the application of the research and development deduction based on a cassation complaint filed by the taxpayer and decided to return the case for further proceedings.

During the audit, the tax authority examined whether the conditions for applying the deduction were met, focusing again on proving the implementation of controls and evaluating the project's progress. It also assessed whether the appellant provided sufficient evidence of the relationship between the incurred costs and the project, including records of hours worked and material consumption. The tax authority further verified whether the activities carried out within the project met the definitional characteristics of research and development, particularly that they did not involve standard modifications to the production process.

According to the tax authority, the taxpayer did not demonstrate that they had actually implemented the method of control and evaluation of the project's progress as specified in their research and development project. The documentation submitted, in their view, did not demonstrate the course of the actual development process, and it was unclear how the process of creating the new technological procedure and the related control and technical steps unfolded.

The regional court agreed with the tax authority that the taxpayer had not proven the implementation of controls and evaluation of the project's progress and therefore dismissed their lawsuit. However, the Supreme Administrative Court noted that the regional court did not address the key objections raised by the taxpayer, and its conclusion regarding the failure to meet the condition of proving the actual implementation of controls and project evaluation lacked support in the established factual state and the case file, making it unreviewable.

The Supreme Administrative Court emphasized that both formal and material conditions must be met for the deduction to be recognized, and the regional court should have assessed all evidence in their mutual context. Furthermore, the Supreme Administrative Court confirmed that for the application of the research and development deduction, the legally established conditions must be evaluated based on proper and correctly conducted evidence. If the taxpayer proves the legitimacy of the deduction with standard evidence, there is no legitimate reason to require additional extraordinary evidence.

This case highlights the complexity and importance of proper documentation and record-keeping in the field of research and development, as well as the necessity for thorough assessment of all aspects of projects seeking tax deductions. At the same time, however, it demonstrates that the tax administrator's requirements for evidence have their limits.

If you plan to apply for a research and development deduction, it is advisable to carefully prepare a project that meets formal requirements and thoroughly document the method of evaluation and control of the research activities.

Authors:

Martin Hladký

Veronika Kruttová

Jana Kočí